Five promoters of the now-shuttered cryptocurrency Ponzi scheme BitConnect have been charged with violating federal securities laws by the U.S. Securities and Exchange Commission.
Its complaint says that the individuals relied on YouTube videos for recruiting more investors to the scheme. They would receive a commission based on how successful their recruitment was.
The agency's assistant regional director Lara Shalov Mehraban claims that those who illegally capitalize on public interest in cryptocurrencies will be held accountable:
We allege that these defendants unlawfully sold unregistered digital asset securities by actively promoting the BitConnect lending program to retail investors. We will seek to hold accountable those who illegally profit by capitalizing on the public's interest in digital assets.
The $2 billion scam imploded on Jan. 17, 2018, shutting down its lending and trading services. The BCC token collapsed over 90 percent in hours.
BitConnect allowed its customers to loan their crypto in order to receive outsized returns. Like a textbook pyramid scheme, it had a multi-referral program that was designed to bring more people into the sham.